Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the
Indian economy over the last five decades. MSMEs not only play crucial role in providing large employment
opportunities at comparatively lower capital cost than large industries but also help in industrialization
of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of
national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector
contributes enormously to the socio-economic development of the country.
Khadi is the proud legacy of our national freedom movement and the father of the nation.
Khadi and Village Industries (KVI) are two national heritages of India. One of the most significant aspects
of KVI in Indian economy is that it creates employment at a very low per capita investment. The KVI Sector
not only serves the basic needs of processed goods of the vast rural sector of the country, but also provides
sustainable employment to rural artisans. KVI today represent an exquisite, heritage product, which is 'ethnic'
as well as ethical. It has a potentially strong clientele among the middle and upper echelons of the society.
Coir Industry is an agro-based traditional industry, which originated in the state of Kerala and proliferated
to the other coconut producing states like Tamil Nadu, Karnataka, Andhra Pradesh, Orissa, West Bengal,
Maharashtra, Assam, Tripura, etc. It is an export oriented industry and having greater potential to enhance
exports by value addition through technological interventions and diversified products like Coir Geotextiles etc.
The acceptability of Coir products has increased rapidly due to its 'environment friendly' image.
Ministry of Micro, Small & Medium Enterprises (M/o MSME) envision a vibrant MSME sector by promoting growth
and development of the MSME Sector, including Khadi, Village and Coir Industries, in cooperation with
concerned Ministries/Departments, State Governments and other Stakeholders, through providing support to
existing enterprises and encouraging creation of new enterprises.
The Micro; Small and Medium Enterprises Development (MSMED) Act was notified in 2006 to address
policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector.
The Act seeks to facilitate the development of these enterprises as also enhance their competitiveness.
It provides the first-ever legal framework for recognition of the concept of "enterprise" which comprises
both manufacturing and service entities. It defines medium enterprises for the first time and seeks to
integrate the three tiers of these enterprises, namely, micro, small and medium. The Act also provides for
a statutory consultative mechanism at the national level with balanced representation of all sections of
stakeholders, particularly the three classes of enterprises; and with a wide range of advisory functions.
Establishment of specific funds for the promotion, development and enhancing competitiveness of these enterprises,
notification of schemes/programmes for this purpose, progressive credit policies and practices, preference in
Government procurements to products and services of the micro and small enterprises, more effective mechanisms
for mitigating the problems of delayed payments to micro and small enterprises and assurance of a scheme for
easing the closure of business by these enterprises are some of the other features of the Act.
On 9 May 2007, subsequent to an amendment of the Government of India (Allocation of Business) Rules,
1961, erestwhile Ministry of Small Scale Industries and the Ministry of Agro and Rural Industries were
merged to form the Ministry of Micro, Small and Medium Enterprises (M/o MSME). This Ministry now designs
policies and promotes/ facilitates programmes, projects and schemes and monitors their implementation with
a view to assisting MSMEs and help them to scale up.
The primary responsibility of promotion and development of MSMEs is of the State Governments. However,
the Government of India, supplements the efforts of the State Governments through various initiatives.
The role of the M/o MSME and its organizations is to assist the States in their efforts to encourage
entrepreneurship, employment and livelihood opportunities and enhance the competitiveness of
MSMEs in the changed economic scenario. The schemes/ programmes undertaken by the Ministry and its organizations seek
to facilitate/provide: i) adequate flow of credit from financial institutions/banks; ii) support for technology upgradation and
modernization; iii) integrated infrastructural facilities; iv) modern testing facilities and quality certification; v)
access to modern management practices; vi) entrepreneurship development and skill upgradation through appropriate training
facilities; vii) support for product development, design intervention and packaging; viii) welfare of artisans and workers; ix)
assistance for better access to domestic and export markets and x) cluster-wise measures to promote capacity-building and
empowerment of the units and their collectives.
The M/o MSME is having two Divisions called Small & Medium Enterprises (SME) Division and Agro & Rural Industry
(ARI) Division. The SME Division is allocated the work, inter- alia, of administration, vigilance and
administrative supervision of the National Small Industries Corporation (NSIC) Ltd., a public sector
enterprise and the three autonomous national level entrepreneurship development/training originations.
The Division is also responsible for implementation of the schemes relating to Performance and Credit Rating
and Assistance to Training Institution, among others. SME Division is also responsible for preparation and
monitoring of Results- Framework Document (RFD) as introduced in 2009 by the Cabinet Secretariat under Performance
Monitoring and Evaluation System (PMES). The ARI Division looks after the administration of two statutory
bodies viz. the Khadi and Village Industries Commission (KVIC), Coir Board and a newly created organization
called Mahatma Gandhi Institute for Rural Industrialization (MGIRI). It also supervises the implementation
of the Prime Minister's Employment Generation Programme (PMEGP).
The Implementation of policies and various programmes schemes for providing infrastructure and support
services to MSME's is undertaken through its attached office, namely the Office of the Development
Commissioner (010 DC (MSME)), National Small Industries Corporation (NSIC), Khadi and Village Industries
Commission (KVIC); the Coir Board, and three training institutes viz., National Institute for Entrepreneurship
and Small Business Development (NIESBUD), NOIDA, National Institute for Micro, Small and Medium Enterprises
(NI-MSME), Hyderabad, Indian Institute of Entrepreneurship (lIE), Guwahati and Mahatma Gandhi Institute for
Rural Industrialization (MGIRI), Wardha a society registered under Societies Registration Act, 1860.
The National Board for Micro, Small and Medium Enterprises (NBMSME) was established by the Government
under the Micro, Small and Medium Enterprises Development Act, 2006 and Rules made thereunder.
It examines the factors affecting promotion and development of MSME, reviews existing policies
and programmes and make recommendations to the Government in formulating the policies and programmes
for the growth of MSME.
Office of the Development Commissioner [MSME]
The Micro, Small and Medium Enterprises- Development Organisation (MSME-DO) is headed by the Additional
Secretary & Development Commissioner (MSME). The Office of the Development Commissioner (Micro, Small &
Medium Enterprises) assists the Ministry in formulating, co-ordinating, implementing and monitoring different
policies and programmes for the promotion and development of MSMEs in the country. In addition, it provides
a comprehensive range of common facilities, technology support services, marketing assistance, etc. through
its network of 30 Micro, Small and Medium Enterprises-Development Institutes (MSME-Dls); 28 Branch MSME-Dls;
4 MSME Testing Centres (MSME-TCs); 7 MSME-Testing Stations (MSME-TSs); 2 MSME-Training Institutes (MSME-Tls);
and 1 MSME-Technology Development Center-Hand Tools (MSME-TDC-Hand Tools). The % DC (MSME) also operates a
network of Tool Rooms and Technology Development Centres (including 2 Footwear Training Institutes) which
are autonomous bodies registered as Societies under the Societies Act. The Office implements a number of
schemes for the MSME sector, the details of which have been duly incorporated in the booklet.
Khadi & Village Industries Commission
The Khadi & Village Industries Commission (KVIC), established under the Khadi and Village Industries
Commission Act, 1956 (61 of 1956), is a statutory organization engaged in promoting and developing khadi
and village industries for providing employment opportunities in rural areas, thereby strengthening the
rural economy. The Commission is headed by full time Chairman and consists of 10 part-time Members.
The KVIC has been identified as one of the major organizations in the decentralized sector for generating
sustainable rural non-farm employment opportunities at a low per capita investment. This also helps in
checking migration of rural population to urban areas in search of the employment opportunities. The main
functions of the KVIC are to plan, promote, organize and assist in implementation of the
programmes/projects/schemes for generation of employment opportunities through development of khadi
and village industries. Towards this end, it undertakes activities like skill improvement, transfer of
technology, research & development, marketing, etc. KVIC co-ordinates its activities through State
KVI boards, registered societies and cooperatives. It has under its aegis a large number of industry-specific
institutions spread in various parts of the country.
The Coir Board is a statutory body established under the Coir Board Industry Act, 1953 (NO. 45 of 1953)
for promoting overall development of the coir industry and improving the living conditions of the workers
engaged in this traditional industry.
The Coir Board consists of a full-time Chairman and 39 part- time Members. The activities of the Board
for development of coir industries, inter-alia include undertaking scientific, technological and economic
research and development activities; collecting statistics relating to exports and internal consumption
of coir and coir products; developing new products and designs; organizing publicity for promotion of
exports and internal sales; marketing of coir and coir products in India and abroad; preventing unfair
competition between producers and exporters; assisting the establishment of units for manufacture of the
products; promoting co-operative organization among producers of husks, coir fibre, coir yarn and
manufactures of coir products; ensuring remunerative returns to producers and manufacturers, etc.
The Board has promoted two research institutes namely, Central Coir Research Institute (CCRI),
Kalavoor, Alleppey, and Central Institute of Coir Technology (CICT), Bengalooru for under taking
research activities on different aspects of coir industry which is one of the major agro based rural
industries in the country. The two major strengths of the coir industry
are it being export oriented and generating wealth out of the waste (coconut husk).
National Small Industries Corporation Limited (NSIC)
NSIC implements its various programmes and projects throughout the country through its 9 Zonal Offices,
39 Branch Offices, 12 Sub Offices, 5 Technical Services Centres, 3 Technical Services Extension Centres,
2 Software Technology Parks, 23 NSIC-Business Development Extension Offices and 1 Foreign Office.
NSIC, established in 1955, is headed by Chairman-cum-Managing Director and managed by a Board of Directors.
The main function of the Corporation is to promote, aid and foster the growth of micro and small enterprises in the country, generally on commercial basis.
NSIC provides a variety of support services to micro and small enterprises catering to their different
requirements in the areas of raw material procurement; product marketing; credit rating;
acquisition of technologies; adoption of modern management practices, etc.